Bush’s Parting Shot

Last week, the outgoing Bush administration changed the list of the $116.8 million in sanctions against European food products imposed as part of the European Union’s (EU) ban on beef produced with growth promotants.

Last week, the outgoing Bush administration changed the list of the $116.8 million in sanctions against European food products imposed as part of the European Union’s (EU) ban on beef produced with growth promotants. The move was designed to increase the pressure on the EU to drop the ban.

“For over a decade, we have been trying to resolve this dispute with the EU but our efforts have gone nowhere,” said outgoing U.S. Trade Representative Susan Schwab. “In these circumstances, I’ve decided it’s time to modify the duties to try to encourage a resolution of this longstanding dispute so as finally to provide a fair outcome to the U.S. beef industry, while addressing the economic impact of such long-standing duties on U.S. interests.”

The EU reacted angrily to the move and vowed to challenge it at the World Trade Organization (WTO).

However, as recently as Oct. 16, 2008, the WTO Appellate Body confirmed that the U.S. has the right to continue imposing retaliatory sanctions until the dispute over the EU ban on hormone-treated beef is resolved, the National Cattlemen’s Beef Association (NCBA) says.

“The WTO ruled that this ban costs the U.S. more than $116 million in trade each year, but that doesn’t take into account the many new nations that have since joined the EU or the increase in demand we have seen globally,” says Gregg Doud, NCBA chief economist. “A seismic shift occurred in 2003 when the EU went from a net exporter of beef to a net importer. Today, the EU imports almost as much beef as the U.S. exports to the entire world. The potential market for U.S. beef in Europe could be substantially higher without this trade barrier.”